Declining into Support

Today 03/31/22 the S&P 500 (SPX) closed at the low of the day in the largest and longest correction since the 03/14/22 bottom. 

The 15-minute SPX chart courtesy of Trading View illustrates the recent action.

The 03/21/22 blog “S&P 500 – Fibonacci Time Connection Between 2010 and 2022.  Illustrated that an Elliott wave – Horizontal Triangle correction probably completed at the 03/14/22 bottom. The Fibonacci retracement  levels  are calculated from the 03/14/22 bottom.  The  rally from 03/14/22 to 03/29/22 has the look of an Elliott five wave impulse with clear subdivisions. The low on 03/31/22 is close to a Fibonacci .236 retrace of the rally from 03/14/22 and is  in the area  of the presumed Minor wave “4”, a logical place for the decline to end.

The SPX – 5 – minute Point & Figure (PF) chart  illustrates  potential support areas.

In addition to reaching  the Fibonacci .236 retracement level the SPX has hit a 7-column PF  support zone. 

If the SPX can break below the .236 support it could complete the decline at  the .382 support level which is also near another 7-column row of PF support.

Note that if the .382 support level is broken the next significant PF support is in the low 4200 area. 

There’s a high probability that the decline from the SPX 03/29/22 high  is  Intermediate wave (2) of a developing five – wave Elliott  impulse pattern.  If so, after it bottoms the SPX could rally to near the all-time high at 4818. 

The most likely areas  for an Intermediate wave (2)  bottom are  either the .236 or .382 retracement levels.  If the bottom is not already in place it could be  made in the next few trading  days.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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